Insuring an electric cargo bike

Insuring bicycles is already complicated.  Bicycles with electric assists (or “e-bikes”) add another layer to this, which we recently navigated.  Homeowners and renters insurance policies seem to cover some losses but not all.  They often have different kinds of coverage limits, which could mean the need for a separate rider for full coverage.  Here is what we found.

First, there seems to be as much confusion in the insurance industry as there is in bicycle owners.  Details are going to vary by provider, and I wouldn’t be surprised if some providers even have differently underwritten policies.  So, treat this post as an introduction and a beginning list for what to ask about, and make sure you talk to your agent (or agents if you are shopping for coverage).  This post is not specific legal, financial, or insurance advice.  Even further, ask enough questions that they need to go check with the underwriters because they might get it wrong at first, and trying to make a claim when the policy differs from what the agent thought is not a good place to be.

It’s a good idea to check what your homeowners or renters policy already covers.  Start with the big things – theft, you crash (both your loss and also your liability), and someone crashes into you but won’t/can’t pay.  Ask about limits.  If you’re in a no-fault locale for vehicle collisions, then you probably have additional concerns.  Our agent (after checking with the underwriters) found that we had zero coverage due to the motor.  If you do have coverage, then you will still want to probe the conditions and limitations for it.  There is a handy chart on velosurance.com with different occurrences.  A lot of these are aimed at racing cyclists so may not be relevant.

We learned that the electric motor caused our bicycle to be classified as a motorcycle, which seemed ridiculous at first until we realized that it was really being compared to a moped.  While e-bikes and mopeds have differences under WA state law (and most places), they are close.  An assisted family bicycle is going to be ridden a lot more like a non-racing bicycle than a racing one or moped, but that’s not how they classified it.

The other option is a bicycle-specific provider such as velosurance.  This may be your only option for (currently) more exotic things like the Organic Transit ELF (side note: do your own research rather than trusting their information about insurance or local classification).  We found that insurance costs substantially differed between our provider and velosurance, and furthermore the cost breakdown was fundamentally different.  Velosurance is using bicycle theft data (which is not pretty), so theft coverage is very expensive – basically driving most of the cost of the insurance.  Other costs such as liability are not negligible, so they would still need to be analyzed.  On the other hand, our provider’s quote looked like a typical car insurance quote with comprehensive, collision, liability, and under- and un-insured motorist coverage being the main components.  Theft is part of comprehensive (basically, losses of the bicycle not involving collisions).  Motorcycle theft rates are much lower.  We’re not aware of theft data on electronically assisted longtails.  They are basically as heavy as the smallest mopeds and require a key (to run the motor), but they could be ridden away without the assist.  We think there will be a lot of flux in coverage as the providers figure this out.

With our provider, the bulk of the quote instead went towards under- and un-insured motorist coverage, and the bulk of that towards medical costs.  This is the case where someone else is at fault but doesn’t have sufficient coverage; it includes hit-and-runs.  The strange thing for us is that we don’t have this coverage when riding an unassisted bicycle or running/walking, and riding an assisted bicycle hardly seems more dangerous.  The bulk of this coverage is redundant with normal health insurance, but among the additional things it covers are (1) the bicycle itself, (2) medical deductibles, and (3) extra perks like “lost wages”.  We were interested in (1), and it turned out that our provider would not write a policy where under- and un-insured motorist coverage only covered the vehicle, but we were able to set very low amounts for the medical costs.  This ended up covering (2), which we would have declined to do otherwise – it didn’t really make sense to pay for a lower (or non-existent) medical deductible for just one activity.  For (3), there is some risk, but the coverage itself is also limited.  It might be redundant with normal long-term disability coverage.  It doesn’t pay for work that doesn’t include wages (like raising children or volunteering).  And in the case where you might need it, your coverage might be exhausted by medical costs, leaving little or nothing for the lost wages anyway.

We chose the motorcycle coverage with minimal under- and un-insured motorist coverage.  To give an idea of costs, the velosurance coverages were at least as expensive than our car insurance (one car, low miles).  The original motorcycle quote was about half of our car insurance, and our final coverage was about half that.  We hesitate to make a recommendation, but we’ve heard that some agents have been unable to navigate this area.  [Edit: We started our policy with Jim Howard at State Farm, but he has retired.  Our coverage is now with Christy Niemann, also at State Farm.  We haven’t gone through the process of starting a policy with her, but she has reviewed ours and says that she can do them for anyone in Washington State.  This mention is not sponsored.]

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